Windsor Framework: Parcel Delivery

16:00:00

I will call the Member in charge of the debate to move the motion and then I will call the Minister to respond. I remind other Members that they may only make a speech with prior permission from the Member in charge and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

I beg to move, That this House has considered the impact of the Windsor Framework on parcel deliveries across the Irish Sea. It is a pleasure to serve under your chairmanship, Ms Lewell. Tomorrow, 1 May, the noose of the Irish sea border will tighten even further in respect of business in Northern Ireland. We already have the red lane Irish sea border, subject to the full complement of EU requirements, through which all raw materials for our businesses have to pass. We also have what was called the green lane, which has been renamed but otherwise little about it has changed, for the passage of other goods; we have a business-to-consumer border for parcels; and now—in some ways the most threatening because of the scale of the businesses that will be affected—we have the business-to-business parcel border. Of course, that is a border partitioning the supposed United Kingdom and its supposed internal market. The essence of an internal market is that goods move unfettered and unchecked between and within all parts of it. We now have something else, courtesy of the absurd protocol—or, as we now call it, the Windsor framework. In view of the fact that that decreed that we in Northern Ireland are subject to the EU’s customs code, which in turn decrees that Great Britain is a third or foreign country, we now have the absurdity of various dimensions of border for the passage of goods from GB to Northern Ireland. For 200 years, the Northern Ireland economy has been intensely integrated with the GB economy, particularly in manufacturing. It was always the northern part of Ireland that had the big manufacturing sectors. Therefore, the integration, in particular with regard to the supply of raw materials, has been pivotal and GB has been the primary source of all that. Now, parcels will be subject to rigorous EU requirements, including the requirement for a commodity code—

Will the hon. and learned Gentleman give way?

In a moment. Information must be provided about the country of origin each item, the value of each item and the total value of all the items in the parcel, and any goods that are at risk of passing into the EU’s single market across the border. One of the weaknesses of the protocol is the presumption that everything is at risk of passing, and therefore any raw material—if it is going into manufacturing, who knows where it will end up?—has to go through all that rigour. That is a preposterous imposition, not just in bureaucracy, but in cost and making Northern Ireland non-competitive. It means that a business manufacturing something in Northern Ireland that it wants to sell back on the GB market or wherever is subject to restraints, which will increase costs, making it less and less competitive. That is one of the greatest iniquities of the sea border and of the business-to-business parcels border. We have had the protocol in place for four years. Is there any evidence that business parcels are imposing any harm on the EU single market? Have the Government, the EU or anyone else carried out an audit of the alleged harm that business parcels passing from GB to Northern Ireland could do? For four years, they have been flowing unfettered because of the grace periods, so where is the harm caused to the single market that must now be protected from?

One of the points that the Secretary of State will probably make in response is that firms can apply to be part of the UK internal market scheme and therefore escape some of this by showing that goods are not at risk. As the hon. and learned Member has pointed out, there is no evidence that goods are at risk, but His Majesty’s Revenue and Customs says that it could take months for firms to have their applications to the internal market scheme processed, and even when they are processed, the amount of work that must go in to show that the goods did not go into the Irish Republic adds considerable cost and is a considerable barrier to doing trade.

Of course, the natural, inevitable consequence of that is that GB suppliers will simply say, “It’s not worth the candle. We’re not going to make the effort. Why should we put ourselves through all these hoops in order to supply to Northern Ireland? It’s not a huge market in the first place. We’ll simply stop supplying.” That has already happened. I constantly receive complaints from consumers, but increasingly I am getting them from businesses that say, “We know that our suppliers will simply stop supplying.” That is going to be another hammer blow to our economy.

I congratulate the hon. and learned Member for bringing forward the debate. He is right to underline the issues and the concerns of both his constituents and mine. The internal market movement information obligation, which begins tomorrow, means that importers must be members of the internal market scheme as authorised parties, as my right hon. Friend the Member for East Antrim (Sammy Wilson) referred to. My constituents tell me that they are most concerned and confused, and that they do not quite understand the system. Does the hon. and learned Gentleman agree that it is totally unrealistic for the Government to expect small businesses and individuals—my constituents in Strangford—to understand the obligations and abide by them due to ridiculous EU interference? The Government have an easier way of sorting this out: they must take steps to legally remove the obligation from their citizens in Northern Ireland. Do that and the problems are solved.

Indeed. This is a real issue. In my constituency of North Antrim, I have many satellite small engineering firms. Many of them are subcontractors to Wrightbus, for example. They get their raw materials from GB. To get a simple parcel of bolts, nuts, washers or whatever, because they are manufacturers, they will now have to go through the processes of the red lane business-to-business border. That is in circumstances in which there is no evidence—if there were, we would have heard of it—that the EU’s vast single market is being the least bit impacted by business-to-business parcels. The people who will now be affected are those businesses —the people who employ my constituents. The other consequence of the machinations of this border is that when GB suppliers stop supplying, firms will have to get their raw materials from somewhere, and some of them will have to come from the Republic of Ireland. Of course, that is the overall, underlying intent of the Windsor framework: to reorientate the economy of Northern Ireland away from its GB roots and connections, and to force an increase in all-Ireland trade. Here we are, arriving at a situation where we have a perfectly unfettered, all-Ireland single market, but in the nation of which we are a part, the United Kingdom, our single market is fettered and partitioned. That was the intent of the protocol. The protocol was always about making Northern Ireland the price of Brexit, and so it is turning out to be.

The hon. and learned Gentleman has outlined very clearly the bureaucratic issues involved that disturb trade, as well as the long-term political implications, but does he also accept that there are economic implications for firms? First, they are forced to purchase goods from elsewhere, if they were not doing so in the first place—probably because they were too expensive, so now they have more expensive ones. Secondly, many of them have to pay taxes on goods that they bring into Northern Ireland and then reclaim them, and HMRC is taking not weeks, but months to pay those taxes back—if they can be reclaimed—causing cash-flow problems.

The right hon. Member makes a key point. When people bring business-to-business parcels into Northern Ireland from their own country, from GB, and those parcels are decreed—as the presumption is—to be at risk of going into the European single market in their ultimate manifestation, when manufactured, they have to not only complete the full EU-dictated data regime of declarations, but pay duty. People have to pay duty to bring goods from their own country to another part of their own country. That is how extensive and wrong placing Northern Ireland in the EU single market and customs code has proven to be: when goods are moved now, they are subject to taxation tariffs, because they are moving from a so-called foreign single market into what is decreed to be the entry point of the EU’s single market. I have a question for the Secretary of State: where and when will those duties be collected? As the right hon. Member pointed out, we already know that when duties are collected in the red lane, for example, they may be recoverable, if someone can show—the onus is on them—that the goods did not go into the EU single market, but the duty is paid on the presumption that they will, and the process to reclaim it is taking months upon months. My other question for the Secretary of State is: will parcels be held until the duties are paid? Will we really get into the ludicrous situation where someone buying a parcel of bolts to bring to Ballymena or Ballymoney will have to pay duty on those bolts because he is bringing them from a foreign market, even though that is the GB market? Where and when will he have to pay that duty? We all know that he will wait months upon months to get that duty back, if he can demonstrate—it is very difficult in a manufacturing situation—that the end product never went near the EU. The absurdity is obvious, but the political connotations are overwhelming, because they send a clear constitutional message to the people of Northern Ireland: “You are not really any longer a part of the United Kingdom—your trade laws, your customs laws and the laws that govern how you make your goods are now all made by a foreign Parliament, not by this Parliament.” Here am I, a Member standing in the United Kingdom Parliament talking about something governed by rules set by a foreign jurisdiction. They are rules of that foreign jurisdiction and it is their foreign border. That sends a clear constitutional message, which was of course the intent of the protocol: to create, through economics, a stepping stone for Northern Ireland out of the United Kingdom. We now have a Government who, through their junior Minister, tell us that a couple of dodgy opinion polls might be enough to trigger the exit sign for Northern Ireland from the United Kingdom. Those are some of the issues that rightly concern us. They particularly concern businesses, which have been very patient with the Government. They have been looking for guidance for months and have not got adequate guidance, and now they are facing a dire situation, whereby even to keep their businesses going with the basic raw materials that have flowed for decades to them from the source, they will be put through not just the difficulty but the humiliation of not being a proper part of this United Kingdom. The Secretary of State can tell us all he likes about how we have access to dual markets. No, we do not. We have unfettered access to the EU single market, but our access to and from GB is very much fettered by these rules. That is the fundamental objection for a part of the nation whose economy is so intertwined with that of Great Britain.

16:16:00

It is a great pleasure to respond to this debate and to serve under your chairship, Ms Lewell. I begin by offering my thanks— Sitting suspended for Divisions in the House.

16:39:00

Let me start again. It is a pleasure to respond to this debate. I offer my thanks to the hon. and learned Member for North Antrim (Jim Allister) for having secured it, giving us another opportunity to debate the Windsor framework. As Members will be aware, the new arrangements for freight and parcels come into effect tomorrow, 1 May. They are an important step forward in the implementation of the Windsor framework, and an important part of the commitments that were made in the “Safeguarding the Union” Command Paper. They follow a lot of preparatory work across Government and industry to ensure that the necessary processes and systems are in place. The Government recognise, and I recognise, that the new arrangements represent a change for some businesses when sending and receiving goods, but I must be frank: the system in place since the UK formally left the EU was never viable in the long term. My point goes right back to the reason why we have a Windsor framework, which the hon. and learned Gentleman and I have debated many times: when we left the European Union, there was an issue that needed to be addressed. The United Kingdom had one set of rules, and the European Union had another. In every other part of the world, trade between those two entities would be governed by a border, and stuff would be checked to ensure that what was coming in complied with the rules of one jurisdiction or the other. The unique difference in respect of Northern Ireland is that there is no practical border between Northern Ireland and the Republic. Therefore, the question that the previous Government had to address when negotiating the Windsor framework was: as a good neighbour, how do we ensure that goods that move into the Republic—and therefore into the European Union—comply with the rules of that jurisdiction, in exactly the same way that the United Kingdom ensures that goods that come into our jurisdiction comply with our rules? That is the first point. The Windsor framework is a huge improvement on the Northern Ireland protocol, which, as I have said many times, was never going to work.

The answer for the Secretary of State, and indeed the last Government, shamefully, was to sacrifice the territorial integrity of the United Kingdom and to allow part of the United Kingdom to be governed by laws that we do not make and cannot change. Is it not a principle of international law—to which the EU is supposed to adhere as well—that in agreements and treaties we should respect, not challenge, the territorial integrity of those with which we reach the agreement? That is the source of the problem. We sacrificed the territorial integrity of the United Kingdom in respect of Northern Ireland in order to placate the EU, who had their objectives in that regard.

I simply do not accept that characterisation of what we are debating and what I am seeking to describe. To return to the point that I was in the process of putting to Members, a very practical question had to be addressed. Some may argue, “Well, that’s not our problem. Leave the EU to work out what they’re going to do.” However, that would not be the response of a good neighbour. We would not do it ourselves, and therefore we should not do that to the EU. The Windsor framework recognises the nature of the practical problem and finds a mechanism for dealing with it. The same is true in respect of parcels, because the United Kingdom would not allow parcels from any other part of the world to come in without knowing what was in them. We would not permit that, would we? Certainly not. That is not the arrangement that we operate. In the same way, because once the goods arrive in Northern Ireland, potentially they could move into the European Union, the EU wants to be satisfied in the same way in seeking these new arrangements. That is the fundamental point of principle. What we have is much better than what would have applied had there been an attempt to implement the original Northern Ireland protocol. That is why, when I was in opposition, and before I became the shadow Secretary of State, I welcomed the negotiations of the Windsor framework. I congratulated the then Prime Minister, because it represented a really important way forward. My second point is that by agreeing to the new parcels arrangement, we have unlocked agreement on new customs arrangements that will simplify processes for businesses moving goods via freight. Unnecessary customs paperwork will be removed, and goods will be able to move using a simplified set of what is described as internal market movement information. For example, from tomorrow, the arrangement will reduce the standard range of data fields that need to be completed from a possible 75 to 21 for standard goods. That is, on anyone’s measure, a simplification.

The Secretary of State is making light of the burden that the arrangement places on small businesses. One small local businessman who does business in only one town—where most of his customers come from—told me that to bring goods in from GB, which used to flow freely, he now has 27 pages of paperwork. Since he sells a mixture of all kinds of goods, we can guess how many goods that is spread over. He says, “I could spend all my time filling paper in and have no time to sell goods.” Let us not play down the bureaucratic burden that this presents. For many, it makes business almost impossible.

I am not seeking to play down anything. If the right hon. Gentleman would be kind enough to write to me with further details of the business that he described, I will look into it and come back to him. I was about to say that this change will be further supported by the introduction of the trader goods profile, which holds data based on past movements. That goes directly to the point that the right hon. Gentleman just raised about obligations that the arrangement puts on businesses because, in many cases, that dataset can, in the jargon, auto-populate forms for freight movement. In other words, it can fill in forms automatically so that businesses only have to add ordinary commercial information, such as the volume, weight and invoice value. Over 10,000 UK businesses are now registered for the UK internal market scheme, which allows businesses to take advantage of the new arrangements. The existing “not at risk” arrangements will continue to allow tariff-free movement of eligible goods from GB to NI. The hon. and learned Member for North Antrim referred to the flow of goods. I would simply say that the data shows that the value of goods moving from GB to Northern Ireland has gone up, not down. Qualifying Northern Ireland goods continue to have full, unfettered access to Great Britain when they are sent in parcels or freight, meaning that those parcels can be moved as normal with no new requirements. For parcels sent to consumers—the hon. and learned Gentleman did not touch on that, but I wish to refer to it—no customs declarations, safety or security declarations or customs duties are required for movements from Great Britain to consumers in Northern Ireland under the new arrangement. The practical effect is that there should be no noticeable change for people sending parcels to friends and family in Northern Ireland, and minimal noticeable change for most consumers sending and receiving parcels that move from Great Britain to Northern Ireland. Where parcels are moved between businesses, they can access the same arrangements as freight movements.

The Secretary of State ignores the impact on consumers of the general product safety regulation, which requires the business in GB that is sending to Northern Ireland to have an agent in Northern Ireland and to be in a trusted trader scheme—all the things that are totally alien to supposedly being in the same single market.

I am not ignoring the general product safety regulation. This is a debate about parcels. I am well aware of the issues that arise because of its implementation. There is no bar on traders and businesses sending products to Northern Ireland, or indeed to the European Union. The European Union has put in place that requirement to apply to goods that come into its jurisdiction, for the same reason that I gave at the start of my response to this debate: there has to be a mechanism for ensuring that goods that come in comply with the rules of the EU single market. Many businesses have found a way of having an authorised economic operator. I understand the burden that that puts on particularly small operators, but it is another aspect of the need to ensure that we are good neighbours. I was about to say that the specific arrangements for moving parcels that contain sanitary and phytosanitary goods have not changed. Businesses can make use of the Windsor framework schemes for moving agrifood goods, and the Northern Ireland retail movement scheme and the Northern Ireland plant health label scheme allow GB businesses to send SPS parcels to businesses in Northern Ireland for sale to consumers. That represents a considerable improvement. Guidance and support are available to help businesses understand the schemes. I recognise that the transition to the new arrangements from tomorrow will be challenging for some businesses, but in time they will get used to them. We are in touch with industry to understand where businesses need extra support and assistance. His Majesty’s Revenue and Customs has been alerting businesses—

16:51:00